More than Tesla and SpaceX CEOs have said, other developments are affecting the digital asset market. Experts explain why bitcoin hit $ 40K and then went down.
On June 15, Bitcoin crossed the $ 40 thousand mark, but could not gain a foothold on it. This came after Tesla and SpaceX CEO Elon Musk confirmed the automaker ‘s plans to bring back the ability to pay in bitcoin.
The businessman stressed that this will happen when the majority of the main cryptocurrency miners switch to renewable energy sources.
The day before Bitcoin hit $ 40,000, MicroStrategy CEO Michael Sailor announced that his company had completed a $ 500 million bond placement.
MicroStrategy Completes $500 Million Offering of 6.125% Senior Secured Notes Due 2028 with #Bitcoin Use of Proceeds. @MicroStrategy’s existing approximately 92,079 bitcoins are being held by a newly formed subsidiary, MacroStrategy LLC. $MSTRhttps://t.co/avdKhHDLMH
— Michael Saylor (@michael_saylor) June 14, 2021
On June 17, the CEO of the Kraken crypto exchange Jesse Powell said in an interview with Bloomberg that Bitcoin is environmentally friendly. He also advised Elon Musk to study the mining industry in more detail.
Musk asked Powell on Twitter what data his claims were based on. After that, bitcoin fell in price by more than 1% in two hours, the cryptocurrency is trading at $ 38.8 thousand.
Kraken CEO @jespow: Bitcoin is "greener" than critics say. "I think Elon has some more studying to do." pic.twitter.com/n2Df9D2tvA
— Bitcoin Magazine (@BitcoinMagazine) June 17, 2021
The growth of bitcoin to $ 40 thousand, and the subsequent drop in quotations should not be associated with the statements of Elon Musk, says Yuri Mazur, head of the data analysis department of CEX.IO Broker. In his opinion.
now there is no need to overestimate the role of the billionaire, since the crypto community after the events in May has become more careful about his messages and messages. The recent rise in bitcoin is primarily due to the positive news background, the analyst said.
Growth incentives
One of the key events that supports the current sideways trend of bitcoin is the decision of a large brokerage company Interactive Brokers to allow its clients to trade cryptocurrency until the end of the summer, explained Maria Stankevich, director of development for the EXMO crypto exchange.
She also recalled the plans of the asset management company Victory Capital to create a cryptocurrency investment fund and the creation of a division for trading digital assets in a large American bank – State Street.
The market could react with growth to the statement of the founder of Twitter and Square, Jack Dorsey, who hinted at integrating the Lightning Network protocol into one of his projects, the expert noted.
The Lightning Network is an upgrade to the Bitcoin network that introduces a smart contract system to the blockchain to achieve higher transaction throughput while maintaining the peer-to-peer nature of the Bitcoin protocol.
The movement in the sideways range of $ 32-42 thousand will continue until some serious event occurs on the market, which will significantly affect the quotes, says Maria Stankevich.
Due to the fact that now there is no fundamentally good news, the market is frozen at current levels, Anton Kravchenko, CEO of Xena Financial Systems, is sure. In his opinion, the reduction of “news noise” leads to a decrease in quotations.
Point of entry
The current situation on the crypto market is ideal for entering digital assets, says Maria Stankevich. In her opinion, now there is a correction, which will continue until some high-profile event.
The market may go up after large purchases of cryptocurrency by investment funds or serious shifts in the field of crypto regulation, the expert explained.
Until the end of June, the market will be in a sideways movement, predicts Yuri Mazur. He believes it is important to keep an eye on the Ethereum network update and, in August, the litigation between Ripple and the US Securities and Exchange Commission (SEC). According to the analyst, these events will generate internal movement triggers for the crypto market.
Ethereum developers are planning to release the London update in July, which will completely change the mechanism for calculating fees. Part of the commissions that miners are currently receiving as a reward will be burned.
The SEC accused Ripple of illegally selling $ 1.3 billion in unregistered securities under the guise of XRP tokens at the end of 2020.
